-
8/3/2019 Evolution of Materials Management
1/10
Evolution of MaterialsManagement
-
8/3/2019 Evolution of Materials Management
2/10
Period One: The Early Years (1830-1900)
Charles Babbages book On the economy ofmachinery and
manufacturers, published in1832, referred to the importance of
the
purchasing function.
Babbage wrote that a central officerresponsible for operating
mines was amaterials man who selects, purchases,
receives, and delivers all articles required. An 1870 article
said that judicious purchasing
could save big bucks.
-
8/3/2019 Evolution of Materials Management
3/10
Period One: The Early Years (1830-1900)
Savings potential and profit-leverage effect ofpurchasing became
popular.
The railroads, which were probably the largestorganizations in
the United States at that time ,recognized the crucial impact of
purchasing.
The late 1800s signaled the beginning oforganizing purchasing as
a separate corporatefunction requiring specialized expertise.
-
8/3/2019 Evolution of Materials Management
4/10
Period Two: Growth of PurchasingFundamentals (1900-1939)
This era also witnessed the development ofbasic purchasing
procedures and ideas.
Proper specifications, supplier relations,organization of
purchasing, startedbecoming popular.
Purchasing gained importance during WorldWar I because of its
role in obtaining vitalwar materials.
-
8/3/2019 Evolution of Materials Management
5/10
Period Three: The War Years(1940-1946)
World War II introduced a new period inpurchasing history.
The emphasis on obtaining required (and
scarce) materials during the war influenced agrowth in
purchasing interest.
The membership of the National Association
of Purchasing Agents increased from 3,400in 1934 to 5,500 in
1940 to 9,400 in theautumn of 1945.
-
8/3/2019 Evolution of Materials Management
6/10
Period Four: The Quiet Years(1947-Mid-1960s )
The heightened awareness of purchasing thatexisted during World
War II did not carry over tothe postwar years.
It was hard to visualize a company becomingmore successful than
its competitors because ofits superior procurement.
The postwar period saw the development of the
value analysis technique, pioneered by GeneralElectric in
1947
-
8/3/2019 Evolution of Materials Management
7/10
Period Five: Materials ManagementComes of Age
(Mid-1960s-Late
1970s) The mid-1960s witnessed a dramatic growth of
the materials management concept.
The combined related functions such aspurchasing, inventory
control, receiving, andstores under the authority of one
individual.
The overall objective of materials managementwas to solve
materials problems from a totalsystem viewpoint rather than the
viewpoint ofindividual functions or activities
P i d Fi M t i l M t
-
8/3/2019 Evolution of Materials Management
8/10
Period Five: Materials ManagementComes of Age
(Mid-1960s-Late
1970s) The various functions that might fall under
the materials umbrella included material
planning and control, inventory planningand control, materials
and procurementresearch, purchasing, incoming traffic,receiving,
incoming quality control, stores,materials movement, and scrap
andsurplus disposal.
-
8/3/2019 Evolution of Materials Management
9/10
Period Six: The Global Era (Late1970s-1999)
Never in industrial history has competitionbecome so intense so
quickly.
The spread and rate of technology change
during this period was unprecedented,with product life cycles
becoming shorter.
This intensely competitive period
witnessed the growth of supply chainmanagement.
-
8/3/2019 Evolution of Materials Management
10/10
Period Seven: Integrated SupplyChain Management (Beyond
2000)
Now, more than ever, firms began to takea more coordinated view
of managing theflow of goods, services, funds, and
information from suppliers to endcustomers.
Managers began to view supply chain
management as a way to satisfy intensecost and other improvement
pressures.
